Pay-per-use bandwidth? Not without some ground rules

Molly Wood faces the hard reality that the days of unlimited bandwidth are over, but she's not going to get taken to the cleaners by greedy providers. Here's how to make pay-per-use a fair deal for everyone.

Update: May 17, 2012 Do I get results, or what? Less than a day after this column posted, Comcast announced it would ditch its 250GB data cap in favor of a 300GB cap with the option to buy additional 50GB chunks for $10 each. Not bad, although it's amusing timing given their current fight over Net neutrality and cap-free Xfinity on-demand streaming.

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Bandwidth caps, the death of unlimited data plans, throttling, "data hog" accusations...I get it. Pay-per-use bandwidth is inevitable: the end of unlimited Internet access is at hand. Bandwidth is a limited resource, especially on wireless networks, and despite all the hand-wringing and hair-tearing, the companies that provide us with that bandwidth are going to insist on being paid to provide, maintain, and expand our access.

But before I go quietly into that dark night, it's time we consumers laid down a few ground rules for these companies and for life in a pay-per-use world. Let's start by facing facts: the reason we're so angry about things like Comcast and Time Warner's data caps, Verizon's killing of its grandfathered unlimited data plans, and T-Mobile's service throttling is that we simply don't believe that these companies are telling the truth about their bandwidth hardships.

More often than not, bandwidth management at the corporate level feels like an exercise in greed than in actual resource allocation. (Unchecked greed from American companies with shareholder responsibilities that far outweigh the needs of their customers? Why, I never.)

When Verizon this week announced the end of its grandfathered unlimited data plans, Chief Financial Officer Fran Shammo told investors that moving users to tiered data plans "is beneficial to us." Crucial wording, considering that a Validas study back in February found virtually no difference in data usage between unlimited data plan subscribers and tiered subscribers -- the only difference was the amount of their monthly payment.

When AT&T, earlier this year, started notifying customers on its unlimited plans that they were using too much data and then began slowing that data to a near halt, it gave no ceiling on the amount of data they were allowed to use. Some users reported it seemed to be around 2GB of data per month -- after a successful lawsuit, AT&T set a new cap of 3GB per month on those unlimited plans.

Comcast, Cox, Time Warner, and AT&T all have some form of data caps currently in place for home broadband subscriptions, where they've generally agreed upon 250GB per month as an upper tier (although Time Warner is testing new plans with usage-based billing and a voluntary 5GB limit -- yes, five gigabytes per month). The 250GB cap is quickly proving insufficient for families in particular, but, again, trust and bad behavior marks most customers' relationships with these providers.

Some background: Comcast announced in March that it would stream its Xfinity on-demand content to Microsoft Xbox consoles, and that watching on-demand Xfinity video via Xbox wouldn't count against its data cap. Watching on-demand Netflix via Xbox would, of course, count against the cap. But Comcast said its move doesn't violate Net neutrality because its connection with the Xbox is a private IP network, not the open Internet. Ballsy.

Xfinity on Xbox: This streaming is free!
Microsoft

Netflix CEO Reed Hastings rightfully flipped over that one, and just as Sen. Al Franken started gearing up for a full-scale investigation, The Verge this week pointed out this dishy little blog post by self-proclaimed infrastructure nerd Bryan Berg. Per his own traffic research, he alleges that Comcast is, in fact, delivering and prioritizing Xfinity on-demand video via the open Internet, effectively damaging Netflix's chances of smooth streaming due to congestion, and, if true, just hilariously ignoring Net neutrality even more than we all assumed they already were.

So, you can see where our doubts come in.

How about this: I'll agree that pay-per-use bandwidth is inevitable. In fact, it's here. But if we're going to accept that pay-per-use bandwidth has arrived, then we need to all agree to some ground rules. If I'm going to pay for Internet access like it's electricity or water, it should be treated thusly: as a utility I need, whose availability is not infinite, but which is not unreasonably expensive and which is readily and constantly available.

That means:

Bandwidth caps that are not wildly out of step with people's actual needs: a 250GB cap isn't actually so bad, especially compared with some other countries around the world, but operators need to offer reasonable usage pricing for the cord-cutting, mobile-phone-only families who stream all their video and play multi-player interactive video games on their consoles all night. More importantly, the caps need to adjust accordingly: if Sony is saying that Comcast's caps (and, more likely, discriminatory network management) caused it to ice a streaming video service, the caps are probably not future-proof. They need to adjust to meet demand and reasonable future use.

No shut-offs: Comcast reserves the right to, instead of offering usage-based-billing, actually turn off your Internet access for as much as a year if you exceed its data caps. Beyond unacceptable, especially since, in many places, a single provider like Comcast is the only game in town.

No price gouging: Time Warner wants you to pay up to $55 a month for a 5GB cap and $1 per GB over the cap -- for slow-tier access. Ridiculous. Comcast encourages customers to upgrade to its Business class service to avoid data caps (wouldn't that make businesses the top 1 percent of "data hogs"?), but those plans cost more and require pricier hardware. And in the case of the lowest-tier business plan, the speeds are actually slower than a similarly priced (or much cheaper, depending on the special that month) residential plan.

Transparent limits: No more of AT&T's mysterious throttling based on usage it defines, data usage meters that are not only available for individual use, but available as aggregate data so companies can prove their bandwidth usage claims (yeah, that's a pipe dream, but I can hope).

Fair play (read: Net neutrality): No prioritizing your own services over competitive services. Come on, FCC, get on top of Comcast on this Xfinity thing -- that's just shameful. Bad enough most terrestrial bandwidth providers are also in the business of making sure you don't cut the cord or switch to mobile only. Don't let them get away with that kind of crap.

I understand that bandwidth is a new concept in the modern world, and we've spent the last decade or so figuring out what we'll need and what the market will bear. But the information economy is one of the most vibrant in the world -- if we can figure out reasonable pay-per-use pricing, it will continue to thrive, consumers everywhere will get the access and reliability they need, and everyone will win. That can happen, right? Hello? Is this thing on?

About the author

Molly Wood was an executive editor at CNET, author of the Molly Rants blog, and host of the tech show, Always On. When she's not enraging fanboys of all stripes, she can be found offering tech opinions on CBS and elsewhere, and offering opinions on everything else to anyone who will listen.
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